Tuesday, February 17, 2009

Of Debt and the Economy

Dear Mr. President~I know you have a difficult job, and you face decisions on a daily basis which can and do alter the course of our nation. I want you to know that I pray for you every day.

I love this wonderful country of ours with all my heart. I love what it stands for. I love the freedom that we are afforded which so many countries do not enjoy.

That being said, may I offer some thoughts on this second stimulus/bailout package that has been proposed? To put it in a nutshell, I am extremely disappointed that the government has decided to go through with it, and the results of this action worry me greatly. I didn't like the first one either, but to have two in nearly as many months? I am astounded that some of the top economists in our country have condoned this. Is there something I am missing? I feel like I have a decent grasp of basic economic principles, yet many of these principles are being blatently violated by those who should know them the best. May I share with you some of my concerns, Mr. President?

First and foremost, I make it a practice to occasionally read the constitution, and no where that I can find in that document, does it give the Federal government authority to implement anything like these bailout packages. FDR set an unfortunate precedent during the depression when he started the practice of spending government money on welfare. That being said, the measures he did take to get the country out of depression were supposed to be temporary. Look where we are now. Trillions of dollars in debt, with a huge population of welfare-dependent people. Mr. President, keep in mind that economies naturally fluctuate, but if left alone, a free market economy should always even things out eventually. Think a little more long-term here, Mr. President. What you are doing with this package is highly unsustainable, and very unwise.

That brings me to a second point. How in the world do you propose we pay this enormous debt off? As I see it, either we will become like some of the European countries where 2/3 of their income goes towards taxes, and/or our kids and grandkids will be paying their whole lives for this debt in which they had no involvement. Going to the first option, one of the basic principles of economics is that people respond to incentives. If one were to only receive 1/3 of one's salary, what incentive is there to get a good education and thus a traditionally higher salaried job, especially if you are distributing so many handouts to the poor? It seems like you are offering more of an incentive to remain in poverty.

Since we are on the topic of poverty, I hope I don't sound heartless with my next comment, but with all these handouts and benefits you are giving the poor, again, what is the incentive people have to get jobs and an education when they know they will be taken care of by the government and our taxes? We have created this suppressive culture of poverty in our country. Would you consider a radical change in our welfare system? I will preface this request by again saying that I do not believe welfare is the government's responsibility in the first place. It is the responsibility of individuals, families, churches, charities, etc. However, the idea of government assistance is so deeply entrenched in our society that I suppose it is wishful thinking on my part to want to do away with it. Back to the subject of welfare reform, Mr. President, from observations I have made of people in my own life, when one is not working, busy, and productive, one is not happy and content. When one is on the dole, one's self-esteem tends to plummett. Now, Mr. President, I do realize there are legitimate cases where people need assistance, but I believe that everybody can do something to earn what they receive. If you must give handouts, have people work for what they get. Have them assemble medical or humanitarian kits for people in third world countries, for example. Have them participate in planting a community garden, or beautifying their community. Have them do something, anything, that will allow them to contribute to society, rather then always be "takers." I will guarantee that, though it may be hard for people to adjust to at first, their overall happiness will increase, and I'll bet you anything that crime will significantly decrease as well. I believe this simple idea would bring about some very significant changes for good in our nation. Just a suggestion.

Speaking of poverty, I noticed in your proposed allocation of these stimulus funds, a very large chunk is earmarked for Medicaid. Just out of curiosity, how is this supposed to stimulate the economy, Mr. President?

Another thing: with all of this money being pumped into the system, and more money being printed to pay our nation's debt off, inflation is going to skyrocket down the road. Now Mr. President, I have always been taught that it is a wise thing to save--to set aside some money for a rainy day--but if inflation rapidly increases, what is the point? My dollar will be worth pennies. I remember studying about this in some of my classes in college. Specifically in South America--they did just what we are doing now, with printing off a bunch of money to try to meet their debt obligations. Short term, fine, but longer term? A loaf of bread costed the equivalent of $500! It DOES NOT WORK.

Now, this is all fine and dandy for you now, Mr. President. People love you. You are basically giving them free money. But what are you taking? You are taking away the possibility of a bright future for us and our posterity. You are leaving in it's place a legacy of debt and dependence, which the next leader of our country will have to try to clean up. Good luck with that.